As 2011 is coming to a close, I thought I’d highlight the most popular posts from this year:
1) David Eagleman and the Brain on Trial
2) The University of Twitter: Alain de Botton’s Course in Political Philosophy
4) The Top Five Longreads of 2011 (So Far)
5) The Top Five Longreads of 2011
So if you want to catch up on some interesting reading, check out those links. Happy New Year!
Some startling statistics about our obsession with technology:
The average American spends at least eight and a half hours a day in front of a screen, Nicholas Carr notes in his eye-opening book “The Shallows,” in part because the number of hours American adults spent online doubled between 2005 and 2009 (and the number of hours spent in front of a TV screen, often simultaneously, is also steadily increasing).
The average American teenager sends or receives 75 text messages a day, though one girl in Sacramento managed to handle an average of 10,000 every 24 hours for a month. Since luxury, as any economist will tell you, is a function of scarcity, the children of tomorrow, I heard myself tell the marketers in Singapore, will crave nothing more than freedom, if only for a short while, from all the blinking machines, streaming videos and scrolling headlines that leave them feeling empty and too full all at once.
I noticed that those who part with $2,285 a night to stay in a cliff-top room at the Post Ranch Inn in Big Sur pay partly for the privilege of not having a TV in their rooms; the future of travel, I’m reliably told, lies in “black-hole resorts,” which charge high prices precisely because you can’t get online in their rooms.
In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them — often in order to make more time. The more ways we have to connect, the more many of us seem desperate to unplug. Like teenagers, we appear to have gone from knowing nothing about the world to knowing too much all but overnight.
In 2011, I’ve had the chance to unwind and go internet-free for a few days (at least several independent occasions). One of my resolutions for the coming year is to have more days where I unwind and slow down.
Steve Randy Waldman of Interfluidity has a very smart post outlining his thoughts to this question: why is finance so complex? He argues that, in fact, finance has always been complex. And not only that, finance has been opaque, and “complexity is a means of rationalizing opacity in societies that pretend to transparency.” Opacity in modern finance is a feature, not a bug. If you fully understood the risks of all your investments, he argues, you might be wary of investing…
Using examples from game theory (see stag hunt), Waldman continues:
Like so many good con-men, bankers make themselves believed by persuading each and every investor individually that, although someone might lose if stuff happens, it will be someone else. You’re in on the con. If something goes wrong, each and every investor is assured, there will be a bagholder, but it won’t be you. Bankers assure us of this in a bunch of different ways. First and foremost, they offer an ironclad, moneyback guarantee. You can have your money back any time you want, on demand. At the first hint of a problem, you’ll be able to get out. They tell that to everyone, without blushing at all. Second, they point to all the other people standing in front of you to take the hit if anything goes wrong. It will be the bank shareholders, or it will be the government, or bondholders, the “bank holding company”, the “stabilization fund”, whatever. There are so many deep pockets guaranteeing our bank! There will always be someone out there to take the loss. We’re not sure exactly who, but it will not be you! They tell this to everyone as well. Without blushing.
If the trail of tears were truly clear, if it were as obvious as it is in textbooks who takes what losses, banking systems would simply fail in their core task of attracting risk-averse investment to deploy in risky projects. Almost everyone who invests in a major bank believes themselves to be investing in a safe enterprise. Even the shareholders who are formally first-in-line for a loss view themselves as considerably protected. The government would never let it happen, right? Banks innovate and interconnect, swap and reinsure, guarantee and hedge, precisely so that it is not clear where losses will fall, so that each and every stakeholder of each and every entity can hold an image in their minds of some guarantor or affiliate or patsy who will take a hit before they do.
Opacity and interconnectedness among major banks is nothing new. Banks and sovereigns have always mixed it up. When there has not been public deposit insurance there have been private deposit insurers as solid and reliable as our own recent “monolines”. “Shadow banks” are nothing new under the sun, just another way of rearranging the entities and guarantees so that almost nobody believes themselves to be on the hook.
This is the business of banking. Opacity is not something that can be reformed away, because it is essential to banks’ economic function of mobilizing the risk-bearing capacity of people who, if fully informed, wouldn’t bear the risk. Societies that lack opaque, faintly fraudulent, financial systems fail to develop and prosper. Insufficient economic risks are taken to sustain growth and development. You can have opacity and an industrial economy, or you can have transparency and herd goats.
At the height of the financial crisis, so-called collateralized debt obligations (CDOs) were all the rage with investors. There were also CDOs on CDOs, dubbed CDO^2. This quote by Bank of England official Andrew Haldane illustrates the complexity of such a product:
To illustrate, consider an investor conducting due diligence on a set of financial claims: RMBS, ABS CDOs and CDO^2. How many pages of documentation would a diligent investor need to read to understand these products? Table 2 provides the answer. For simpler products, this is just about feasible – for example, around 200 pages, on average, for an RMBS investor. But an investor in a CDO^2 would need to read in excess of 1 billion pages to understand fully the ingredients.
Waldman’s post is worth checking out in entirety if you want to follow along the game theory examples. They’re fascinating.
I read an article that sites how movie revenue is dropping in the United States:
US box office takings fell to a 16-year low in 2011 despite the success of blockbusters such as the latest in the Transformers, Twilight and Harry Potter series. Ticket revenue in the world’s largest movie market fell 3.5% to $10.2bn, while the estimated number of tickets sold dropped 4.4% to $1.28 billion, the lowest figure since 1995’s $1.26 billion.
Roger Ebert posits some theories on why he thinks movie revenue is dropping:
Ticket prices are too high. People have always made that complaint, but historically the movies have been cheap compared to concerts, major league sports and restaurants. Not so much any longer. No matter what your opinion is about 3D, the charm of paying a hefty surcharge has worn off for the hypothetical family of four.
The theater experience. Moviegoers above 30 are weary of noisy fanboys and girls. The annoyance of talkers has been joined by the plague of cell-phone users, whose bright screens are a distraction. Worse, some texting addicts get mad when told they can’t use their cell phones. A theater is reportedly opening which will allow and even bless cell phone usage, although that may be an apocryphal story.
Refreshment prices. It’s an open secret that the actual cost of soft drinks and popcorn is very low. To justify their inflated prices, theaters serve portions that are grotesquely oversized, and no longer offer what used to be a “small popcorn.” Today’s bucket of popcorn would feed a thoroughbred.
Competition from other forms of delivery. Movies streaming over the internet are no longer a sci-fi fantasy. TV screens are growing larger and cheaper. Consumers are finding devices that easily play internet movies through TV sets. Netflix alone accounts for 30% of all internet traffic in the evening. That represents millions of moviegoers. They’re simply not in a theater. This could be seen as an argument about why newspapers and their readers need movie critics more than ever; the number of choices can be baffling.
My reason for going to the theater less than I’ve ever gone before? Relatively expensive movie tickets and the ability to watch many of the movies I want via Netflix, albeit if I don’t mind their release to DVD/Blu-ray a few months after their opening in theaters.
Finally, I really like Ebert’s final reason:
Lack of choice. Box-office tracking shows that the bright spot in 2011 was the performance of indie, foreign or documentary films. On many weekends, one or more of those titles captures first-place in per-screen average receipts. Yet most moviegoers outside large urban centers can’t find those titles in their local gigantiplex. Instead, all the shopping center compounds seem to be showing the same few overhyped disappointments. Those films open with big ad campaigns, play a couple of weeks, and disappear.
Have you been going to the movies less this year than in years prior? What’s your primary reason?
From the latest issue of New York Times Magazine, a discouraging statement for those of us trying to lose weight:
While researchers have known for decades that the body undergoes various metabolic and hormonal changes while it’s losing weight, the Australian team detected something new. A full year after significant weight loss, these men and women remained in what could be described as a biologically altered state. Their still-plump bodies were acting as if they were starving and were working overtime to regain the pounds they lost. For instance, a gastric hormone called ghrelin, often dubbed the “hunger hormone,” was about 20 percent higher than at the start of the study. Another hormone associated with suppressing hunger, peptide YY, was also abnormally low. Levels of leptin, a hormone that suppresses hunger and increases metabolism, also remained lower than expected. A cocktail of other hormones associated with hunger and metabolism all remained significantly changed compared to pre-dieting levels. It was almost as if weight loss had put their bodies into a unique metabolic state, a sort of post-dieting syndrome that set them apart from people who hadn’t tried to lose weight in the first place.
“What we see here is a coordinated defense mechanism with multiple components all directed toward making us put on weight,” Proietto says. “This, I think, explains the high failure rate in obesity treatment.”
While the findings from Proietto and colleagues, published this fall in The New England Journal of Medicine, are not conclusive — the study was small and the findings need to be replicated — the research has nonetheless caused a stir in the weight-loss community, adding to a growing body of evidence that challenges conventional thinking about obesity, weight loss and willpower. For years, the advice to the overweight and obese has been that we simply need to eat less and exercise more. While there is truth to this guidance, it fails to take into account that the human body continues to fight against weight loss long after dieting has stopped. This translates into a sobering reality: once we become fat, most of us, despite our best efforts, will probably stay fat.
As with many preliminary studies, the evidence is inconclusive. Yet, if it pans out, dieting and exercise books will have to be re-written.
This Friday, December 30, will not exist on the tiny nation of Samoa. That’s because the country will skip the day and go from 11:59:59PM Thursday to 12:00:00AM Saturday. But why?
People in Samoa (population 193,000) want to be closer time-wise to Australia, New Zealand, China and Tonga because they do so much more day-to-day business with those relatively nearby nations than with the rest of the world. And the problem until now, for example, has been that when it’s 8 a.m. Monday in Samoa it’s 8 a.m. Tuesday in Tonga. Business people in Samoa have kind of been losing a working day when it comes to dealing with their nearest neighbors.
Below is a brief video compiled by the Associated Press:
###
(via NPR)
I stumbled upon “My Superpower is Being Alone Forever” in the Awl after perusing the best #longreads chosen by Edith Zimmerman, a writer and co-editor of The Hairpin. Joe Berkowitz writes about online dating, its repercussions, and why some of us are still single:
Putting together a dating profile means performing a self-autopsy and reassembling the pieces into Sexy Robocop. You save what’s worth salvaging and shield the damaged parts with reinforced metal. You strive to find the middle ground between showing you have nothing to hide, and just showing off. You carefully curate your interests as if they were co-op displays in a Barnes & Noble, reveling in the understated complexity of liking both Nicki Minaj and My Bloody Valentine. Your picture gallery broadcasts a series of defensive messages: “See? Other females aren’t afraid of me.” “See? I go to museums sometimes and mimic sculpture-poses because Culture.” “See? I’ve been to a Halloween party so obviously I don’t spend much time alone, crying to The Cure’s Disintegration LP and drinking wine from a can.” Dating profiles reveal more about how you see yourself than how you really are, and more about how you want to be seen than how you will be.
With infinite choice comes infinite opportunities to judge. The more options that exist, the pickier you become. Scrolling through profile after profile, I am transformed into an imperial king, surveying his goodly townsfolk from a balcony on high. Those with minor perceived flaws are summarily dismissed (“Next!”) because surely someone closer to the Hellenic ideal is just around the corner. Anyone cute might be cast aside for the smallest breach of taste: a penchant for saying things like “I love life and I love to laugh” or self-identifying as “witty.” Yet even when I genuinely find myself attracted to someone, I’ll still react with skepticism. What’s the catch? What dark and terrible secret causes her to resort to this thing I am also doing? After scanning closely for red flags and finally deigning her regally worthy, I dispatch a message. But then the truth reveals itself: the king is not her type and also he is not really a king.
No piece on online dating would be complete without a mention of OKCupid:
Everyone has a friend who is so charismatic, brilliant or good-looking that the idea of him or her trolling OKCupid is mind-boggling. I am haunted by those friends. What is it that separates us? Is it gluten? I’m at peace with the fact that Drake sings about how jaded he is from being constantly propositioned by beautiful women—because Drake is crazy-famous. My friends who’d never be mistaken as online daters are not famous, but they also possess some ineffable quality that makes them forever F-able. As far as our social sphere is concerned, they might as well be Drake (or nearest female equivalent): They’re stars, and finding them on a dating site would create cognitive dissonance of Orwellian proportions. Personally, I’ve never felt as spectacularly anonymous as I have as an online dater, united with everyone else on the site in that we all have a reason to be there. I can rationalize about Internet dating for days. I can think up reasons for why the way my grandparents met is outmoded. But I don’t want any woman to think she was my last resort, and I don’t want to imagine that I was hers. When we say, “I’m so glad we found each other,” I don’t want it to refer to the way we had to find each other like hidden files in a hard-drive search.
I highly recommending clicking over to the original article to see Joanna Neborsky’s wonderful illustrations accompanying the piece.
I am not a big fan of Zynga (previously), but I am a big fan of one of their games: Words with Friends. I usually have at least three or four games going on at once on my iPhone/iPad.
And it appears the game is making a big splash not just with the general public, but with celebrities. GQ has an interview with rappers Big Boi and Fabolous about Words with Friends and how they got into playing:
GQ: So when did you get into Words With Friends?
Big Boi: I started playing ’cause my wife was on it. Her and her friends, they were playing the game on the phone all the time. I was like, “What the fuck is this?” They said, “Just start playing, you’ll get into it.” So then we started playing for a $100 a game. When we started she’d kick my ass. She can’t beat me no more.
Fabolous: I think I just started from that same engineer who brought it into my studio. Then it advanced to the phone, and he started having it on his phone, and we could play each other on the phones. His name is Scribble, actually.GQ: Do you have a default strategy?
Fabolous: I definitely play it defensively. When you first start playing you start playing with an offensive mindset, just trying to make words. And as you learn how to play, you get better. It becomes clear that you wanna play on defense, to let other people not get words, and not get the spaces that get you points.
Big Boi: I’m a little strategic but it’s different each game. It’s whatever strategy for me to get my championship belt.GQ: When you get jammed up with bad letters, do you swap out letters?
Big Boi: I swap it out. I swap my shit out.
Fabolous: I swap it out sometimes. Sometimes. Depending on how close the score is, I might not swap out. I might just try to hold steady. But if you can’t make a word, definitely, swap out the letters.GQ: Do you have a favorite word that you’ve played?
Big Boi: I think I played ‘zooms’ for like a 107.
Fabolous: If I get over a 100, I tweet the screen shot. But I had an issue where I did that before. I put it on Twitter because I’m thinking that I wanna shit on somebody and show the whole world what I did, but they seen my [WWF user name] and I got so many friend requests that it ended up freezing my account. I can’t even put my name out there.
They also mention a few gripes with the game, such as people taking many days to make a move. I think Zynga fixed this issue, and now automatically resigns someone if they haven’t made a move in two weeks (I still think that’s too long). And if you’re curious, the biggest word I’ve ever played went for 157 points.
And no, unfortunately the handles of the two rappers aren’t provided in the interview. But if you want to play me, leave a comment with your WwF handle, and I’ll respond to your request.
This is one of the more interesting studies I’ve come across this year:
A new study led by Gabriel Radvansky shows that the simple act of walking through a doorway creates a new memory episode, thereby making it more difficult to recall information pertaining to an experience in the room that’s just been left behind.
Dozens of participants used computer keys to navigate through a virtual reality environment presented on a TV screen. The virtual world contained 55 rooms, some large, some small. Small rooms contained one table; large rooms contained two: one at each end. When participants first encountered a table, there was an object on it that they picked up (once carried, objects could no longer be seen). At the next table, they deposited the object they were carrying at one end and picked up a new object at the other. And on the participants went. Frequent tests of memory came either on entering a new room through an open doorway, or after crossing halfway through a large room. An object was named on-screen and the participants had to recall if it was either the object they were currently carrying or the one they’d just set down.
The key finding is that memory performance was poorer after travelling through an open doorway, compared with covering the same distance within the same room. “Walking through doorways serves as an event boundary, thereby initiating the updating of one’s event model [i.e. the creation of a new episode in memory]” the researchers said.
But what if this result was only found because of the simplistic virtual reality environment? In a second study, Radvansky and his collaborators created a real-life network of rooms with tables and objects. Participants passed through this real environment picking up and depositing objects as they went, and again their memory was tested occasionally for what they were carrying (hidden from view in a box) or had most recently deposited. The effect of doorways was replicated. Participants were more likely to make memory errors after they’d passed through a doorway than after they’d travelled the same distance in a single room.
Another interpretation of the findings is that they have nothing to do with the boundary effect of a doorway, but more to do with the memory enhancing effect of context (the basic idea being that we find it easier to recall memories in the context that we first stored them). By this account, memory is superior when participants remain in the same room because that room is the same place that their memory for the objects was first encoded.
The full paper is here. I am not entirely convinced the effect is causal, but I certainly believe there is a relationship between the walking through a doorway and forgetting. In fact, one of the superstitions that I’ve heard since childhood is that if I have forgotten something, I should turn around and return to the place where I last remembered it. That often involved passing from one room to another via a doorway.
In this video, writer and Oscar-winning documentary maker Errol Morris talks about the nature of truth, art, and propaganda in photography. He draws examples from the photographs of Abu Ghraib and the Crimean war, cited in his book Believing is Seeing. One of the points he makes in this brief video: how does a photograph connect to the physical world? My favorite part comes at around the 3:00 mark, where Morris discusses whether a photograph can be true or false.
Books I Read 